DIAMOND BAR – The City Council unanimously approved a balanced budget Tuesday night for the upcoming fiscal year with an expected $29.9 million in reserves.

Though the city’s revenue is expected to be $1 million less than two years ago, Diamond Bar officials planned to keep the city’s expenses flat to weather the economy.

“That is a direct result of the economic recession we are in,” City Manager James DeStefano said of the dip in revenue.

City officials are hopeful that consumer spending will pick up. The city isn’t expecting a large drop in property or sales taxes.

“This year we are likely to see a slight decrease in sales tax,” DeStefano said. “However, there are signs in the economy that consumer purchasing is increasing.”

The city’s largest upcoming expense is the purchase of a new City Hall building, a vacant 55,000-square-foot facility across the street from Diamond Bar’s leased offices.

The building costs $9.9 million and city officials expect to spend an additional $2.1 million in moving and improvement costs, according to city figures.

Though the city still has options on how to finance the purchase, the initial funding will come out of the general fund reserves and drop it to $17.7 million, officials said.

One of the city’s largest expenses is its contract with the Los Angeles County Sheriff’s Department, DeStefano said.

The amount for the contract will cost $5.5 million next year, about two percent higher than the previous year, according to city figures.

The council also approved a 2.4percent cost-of-living increase for city employees, which will add up to $127,000, according to city figures. The city, which has 113 employees, will keep four positions frozen and save $170,550.

Also included in the budget are $4.5 million in capital improvements .